The stars have aligned for equity markets as economies emerge from the Covid crisis.
Investors are feeling the sugar rush as the effects of major stimulus packages begin to translate into increasing evidence of a strong economic rebound.
In the US, the most recent data has reflected this impact, with robust showings from housing, retail sales and an improvement in the jobless claims number.
Meanwhile, the US banks have also reported significant profit hikes, reinforcing hopes that the recovery is firmly on track. Corporate earnings will continue to be a near term feature of investor scrutiny, with the likes of Netflix Inc (NASDAQ:NFLX) and IBM (NYSE:IBM) reporting this week.
- US funds back in the spotlight, but should you buy?
- ii view: JP Morgan expects robust multi-year economic growth
- ii view: new Citigroup CEO off to a promising start
- Want to buy and sell international shares? It’s easy to do. Here’s how
- Investing in the US stock market: a beginner’s guide
From a broader perspective, accommodative monetary and fiscal policies are expected to remain in place which, coupled with the ongoing global vaccine rollout, provide a firm foundations for equities. Both the Dow Jones and S&P500 again closed at record highs and are ahead by 11.7% and 11.4% respectively in the year to date, with the Nasdaq also showing gains of 9% so far this year.
The UK is also receiving renewed investor attention, as a successful vaccine rollout and resilient economic readings combine with improved sentiment following the next stage of the gradual release from lockdown.
Long since an investment pariah in global terms, the beaten down indices have seen the benefit of buying interest based on a valuation gap compared to many global markets, while the cyclical nature of the UK indices is also expected to feel the force of a pronounced economic recovery.
As a result, the FTSE 100 has regained its level above 7,000, with the index now ahead by 8.6% in the year to date.
- Stockwatch: what do bumper US bank results mean for the UK?
- At last, FTSE 100 passes 7,000 again
- Check out our award-winning stocks and shares ISA
For the more domestically focussed FTSE 250, the positive shift in sentiment is even more evident with the index closing at another record high, representing a jump of 10% so far this year and of 73% since the lows of March 2020.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.